XAUUSD - 10/8 - Short Term Reversal Likely
Updated
The Fed's Higher-for-Longer Interest Rates and a strengthening US Dollar has caused a bloodbath in the price of Gold. Since September 1, roughly a month ago, the value of Gold has depreciated from 11953.06/TROY ounce to 11845.80/TROY ounce - a 5.5% drop in value. So, what's next for Gold? Will the selloff continue?
Yes and no. A weaker-than-expected US employment data report led to a slight softening in the strength of the greenback. Therefore, for the short/near term, my bias is bullish and I think Gold prices will undergo a correction and temporarily regain some ground over the next 1-2 weeks. But that's only temporary. Make no mistake, Gold will continue to depreciate at least for the next 4-8 months.
My bullish bias for the short term is based on several confluences:
1. Price completed a minor structure fib and 4H fib, indicating that price may experience a trend reversal soon.
2. Price is consolidating at a daily foundational level which has served as a strong level of support.
3. An oversold signal and bullish divergence has developed between the RSI indicator and price action.
4. The stochastic (88.20/62.75) and momentum (4.310) indicators are both very bullish.
There's a slight chance that price could push down to retest the upper trendline of the descending channel (15m TF) before pushing up to the 1H trendline near 1853.2, as indicated by the bars pattern on my chart.
My price targets for the week are
TP1 = 1853.2 (1H trendline)
TP2 = 1889.916 (minor structure foundation level)
TP3 = 1902.6 (minor structure zone)
TP4 = 1926.7 (4H Trendline)
Yes and no. A weaker-than-expected US employment data report led to a slight softening in the strength of the greenback. Therefore, for the short/near term, my bias is bullish and I think Gold prices will undergo a correction and temporarily regain some ground over the next 1-2 weeks. But that's only temporary. Make no mistake, Gold will continue to depreciate at least for the next 4-8 months.
My bullish bias for the short term is based on several confluences:
1. Price completed a minor structure fib and 4H fib, indicating that price may experience a trend reversal soon.
2. Price is consolidating at a daily foundational level which has served as a strong level of support.
3. An oversold signal and bullish divergence has developed between the RSI indicator and price action.
4. The stochastic (88.20/62.75) and momentum (4.310) indicators are both very bullish.
There's a slight chance that price could push down to retest the upper trendline of the descending channel (15m TF) before pushing up to the 1H trendline near 1853.2, as indicated by the bars pattern on my chart.
My price targets for the week are
TP1 = 1853.2 (1H trendline)
TP2 = 1889.916 (minor structure foundation level)
TP3 = 1902.6 (minor structure zone)
TP4 = 1926.7 (4H Trendline)
Note
Price pushed up to TP1 at market open. Next target is the minor structure foundation level sitting at 1889.916.
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